Question

Distinguish Between:

Fire Insurance and Marine Insurance

Answer 1

Basis of Difference	Fire Insurance	Marine Insurance
1. Meaning	It is a contract in which the insurer promises to pay compensation to the insured if something happens to the subject matter due to fire or related events.	It is a contract whereby the insurance company undertakes to pay compensation to the insured in case of loss to him due to dangers (perils) of the sea.
2. Policy taken by	It can be taken by individuals for their properties or by businessmen for their goods, properties, and business liabilities.	It can be taken by exporters, importers and shipping companies, etc.
3. Subject matter	In fire insurance, the goods and assets or property of the insured are the subject matter.	In marine insurance, goods in the ship, cargo, and freight are the subject matter.
4. Insurable Interest	It must exist at the time of contract and also at the time of loss.	It must exist at the time of contract and also at the time of loss.
5. Compensation	Compensation is paid only in the event of a loss due to fire. Nothing is paid otherwise.	Compensation is paid only in the event of loss due to marine perils. Nothing is paid otherwise.
6. Duration	It does not generally exceed one year.	It is generally done for one year or for the period of voyage.
7. Principle of Indemnity	It is applicable as the insurance company compensates for the financial loss and the insured is brought back to the same financial condition that he was in before the event	It is applicable as the insurance company compensates for the financial loss and the insured is brought back to the same financial condition that he was in before the event.
8. Insurable interest	Insurable interest must exist at the time of taking the policy and also at the time of receiving the claim.	Insurable interest must exist at the time of receiving the claim or at the time of loss only.
9. Number of Policies	Generally, only one policy can be taken but double insurance is possible. However, compensation does not exceed the actual loss.	Generally, only one policy can be taken but double insurance is possible. However, compensation does not exceed the actual loss
10. Tenure	It is generally for a short period like one year.	It is generally for a short period and may range from one month to a year. Normally it does not exceed one year.
11. Principle of Indemnity	It is applicable as the insurance company compensates for the financial loss and the insured is brought back to the same financial condition that he was in before the event.	The company compensates for the financial loss and the insured is brought back to the same financial condition that he was in before the event. It is applicable as the insurance company compensates for the financial loss and the insured is brought back to the same financial condition that he was in before the event.
12. Beneficiary	The beneficiary is the insured who has insured the property or goods.	The beneficiary is the insured person or company.